Child Advocates Call for Fix to ACA's 'Family Glitch'

WASHINGTON -- More than 100 national and state organizations, including medical groups, are urging the president and lawmakers to fix a glitch in the healthcare reform law that could prevent families from gaining affordable healthcare coverage.

In a letter dated March 12, 2012, several groups, including the American Academy of Family Physicians, the American Academy of Pediatrics, and the Children's Hospital Association, pointed out that when the Affordable Care Act (ACA) passed, it contained a "family glitch" that fails to take into account the cost of providing health insurance for an entire family versus a single employee.

Under the ACA, the test of whether an employer-sponsored plan is unaffordable -- and thus whether the employee is eligible to buy a potentially more affordable plan in their state's exchange system with the help of government subsidies -- is based on the cost of coverage for the individual employee. If the cost of self-only coverage for an individual employee does not exceed 9.5% of the person's household income, then the coverage is deemed "affordable" by the federal government.

"This interpretation does not take into account whether coverage is actually affordable for an entire family, and it restricts access for dependents to exchange subsidies when the offer of individual coverage for the employee is deemed affordable," the letter states.

It's significantly less expensive to cover an individual rather than the worker's whole family. In 2011, the average single employee contributed $921 annually toward his or her insurance premium, whereas the average employee with a plan that also covered his or her family paid $4,129 for each year, according to the Kaiser Family Foundation.

By taking into account the individual's insurance costs rather than the much higher cost of covering a whole family, more insurance plans will be deemed affordable, even though the cost may well be out of reach for many families, the groups said.

"Whether through administrative action or legislation clarifying congressional intent, we call on you, our nation's leaders, to act quickly to address this problem, making sure that the test to determine whether coverage is affordable for a family is based on the cost of covering an entire family and not solely on the cost of coverage for an individual employee," according to the letter.

The letter also was signed by the Children's Defense Fund, Easter Seals, and First Focus Campaign for Children.

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